The luxury industry is undergoing significant changes, with growth expected to slow to 1-3% between 2024 and 2027. China and Europe, traditionally key markets, will play a smaller role, while the Middle East and India are set to expand. The slowing global economy and shifting consumer habits are impacting luxury giants like Kering and LVMH.
The new State of Fashion report suggests the industry must reset to restore desirability, creativity, and exclusivity. The focus is shifting from watches and apparel to wellness and travel experiences. Luxury brands face challenges from overproduction, price hikes, and competition from boutique brands.
Kering and LVMH Impacted by Changing Consumer Habits
According to Forbes, Luxury giant LVMH reported a 3% decline in third-quarter growth, down from a 14% rise in 2023. Revenues reached $65.9 billion (€60.8 billion) but show a downward trend. The Fashion and Leather Goods segment, representing nearly half of group revenues, fell by 5%.
CFO Jean-Jacques Guiony cited a 16% decline in Asia, excluding Japan, and flat sales in the U.S. as major factors. The overall slowdown in luxury spending signals potential challenges ahead, as even high-spending consumers resist price hikes. The outlook for the luxury market in 2024 and 2025 appears bleak, with negative growth expected.
LVMH stocks allegedly declining?
A post done on X shows the alleged decline of the LVMH stock, which prompted discussions among netizens. An X user claims that the brand is strong and “will not go anywhere,” implying that it will still be sturdy for the next decades to come.
However, less optimistic users claim that there is “more room for them to go down.” Regardless, Louis Vuitton, a brand under the group, has re-released the Takashi Murakami collection to much fanfare. The collection has reportedly been sold out in many boutiques.
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